Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

On the 19 June last year, CITIC Capital Holdings <a href="http://chinabiologic.investorroom.com/2018-06-19-China-Biologic-Announces-Receipt-of-Non-Binding-Acquisition-Proposal" target="_blank" rel="noopener">made</a> an unsolicited, preliminary non-binding proposal for <a href="https://www.smartkarma.com/entities/china-biologic-products-hold" target="_blank" data-smartkarma-citation="entities:22633:1" rel="noopener">China Biologic Products (CBPO US)</a> - a leading plasma-based biopharmaceutical company in China - for US$110/share, a 30% premium to last close on the 8 June.
On the 21 August last year, a consortium comprising David Gao (the former Chairman and CEO of the CBPO), GL Capital, World Investments Limited and CDH Investments, <a href="http://chinabiologic.investorroom.com/2018-08-21-China-Biologic-Announces-Receipt-of-Competing-Non-Binding-Acquisition-Proposal" target="_blank" rel="noopener">made</a> an unsolicited, preliminary non-binding proposal for US$110/share, a 40% premium to last close.
Both Offers were summarily <a href="http://chinabiologic.investorroom.com/2018-08-24-China-Biologic-Announces-Updates-on-Unsolicited-Acquisition-Proposals-and-Strategic-Private-Placement" target="_blank" rel="noopener">rejected</a> on the 24 August; followed by a US$590mn placement comprising 5.85mn shares (14.9% of diluted shares out) to Centurium Capital, CITIC, Hillhouse Capital Management, and <a href="https://www.smartkarma.com/entities/pw-medtech-group-ltd" target="_blank" data-smartkarma-citation="entities:9891:1" rel="noopener">PW Medtech (1358 HK)</a>.
Gao responded with a <a href="http://chinabiologic.investorroom.com/2018-08-28-China-Biologic-Responds-to-Lawsuit-Filed-in-Cayman-Islands-by-Former-Chairman" target="_blank" rel="noopener">lawsuit</a> challenging the private placement. The lawsuit was <a href="http://chinabiologic.investorroom.com/2018-12-14-China-Biologic-Announces-Dismissal-of-Lawsuit-Filed-in-Cayman-Islands-by-Former-Chairman" target="_blank" rel="noopener">dismissed</a> on the 14 December.
CBPO has now <a href="http://chinabiologic.investorroom.com/2019-09-18-China-Biologic-Announces-Receipt-of-Preliminary-Non-Binding-Going-Private-Proposal" target="_blank" rel="noopener">announced</a> the receipt of a preliminary non-binding proposal from Beachhead Holdings, CITIC, PW Medtech, Parfield International, HH Sum-XXII Holdings Limited and V-Sciences Investments for US$120/share, in cash.
This consortium holds 58% of the shares out in CBPO.  Former CEO Bing Li, who stepped down in May of this year, is the controlling shareholder of Beachhead. Marc Chan (a major shareholder in PW Medtech) is behind Parfield and V-Science is a Temasek vehicle.
Separately, and not mentioned in the CBPO announcement, PW Medtech <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2019/0919/ltn20190919019.pdf" target="_blank" rel="noopener">announced</a> it has entered into a SPA such that it will sell 1mn CBPO shares to Bing Li for $101/share. The sale requires the approval of PW Medtech shareholders which should be a formality. Subsequent to the sale, PW Medtech's holding in CBPO would decline to 13.91% from 16.52% currently.
The PW Medtech announcement also provides details on rolling over of the consortium's shares in CBPO.
This is not a slam dunk proposal, however, 58% of shares out are backing the proposal which will go a long way to getting this deal over the line at the EGM, which requires two-thirds approval.
This remains a non-binding proposal. Assuming a firm Offer emerges, I estimate this deal can (conservatively) complete mid-April.

On the 19 June last year, CITIC Capital Holdings made an unsolicited, preliminary non-binding proposal for China Biologic Products (CBPO US) - a leading plasma-based biopharmaceutical company in China - for US$110/share, a 30% premium to last close on the 8 June.
On the 21 August last year, a consortium comprising David Gao (the former Chairman and CEO of the CBPO), GL Capital, World Investments Limited and CDH Investments, made an unsolicited, preliminary non-binding proposal for US$110/share, a 40% premium to last close.
Both Offers were summarily rejected on the 24 August; followed by a US$590mn placement comprising 5.85mn shares (14.9% of diluted shares out) to Centurium Capital, CITIC, Hillhouse Capital Management, and PW Medtech (1358 HK).
Gao responded with a lawsuit challenging the private placement. The lawsuit was dismissed on the 14 December.
CBPO has now announced the receipt of a preliminary non-binding proposal from Beachhead Holdings, CITIC, PW Medtech, Parfield International, HH Sum-XXII Holdings Limited and V-Sciences Investments for US$120/share, in cash.
This consortium holds 58% of the shares out in CBPO.  Former CEO Bing Li, who stepped down in May of this year, is the controlling shareholder of Beachhead. Marc Chan (a major shareholder in PW Medtech) is behind Parfield and V-Science is a Temasek vehicle.
Separately, and not mentioned in the CBPO announcement, PW Medtech announced it has entered into a SPA such that it will sell 1mn CBPO shares to Bing Li for $101/share. The sale requires the approval of PW Medtech shareholders which should be a formality. Subsequent to the sale, PW Medtech's holding in CBPO would decline to 13.91% from 16.52% currently.
The PW Medtech announcement also provides details on rolling over of the consortium's shares in CBPO.
This is not a slam dunk proposal, however, 58% of shares out are backing the proposal which will go a long way to getting this deal over the line at the EGM, which requires two-thirds approval.
This remains a non-binding proposal. Assuming a firm Offer emerges, I estimate this deal can (conservatively) complete mid-April.

Vital Fluids: Proposal Rejuvenates China Biologics

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Bottom-Up

China Biologic Products / Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/21274" target="_blank" data-smartkarma-citation="entities:21274:1">Grifols SA (GRF SM)</a> and Shanghai RAAS Blood Products Co Ltd (002252.SZ) recently announced an asset exchange that effectively combines the companies' blood products operations in China. This transaction marks the third investment (two are cross-border) into the industry in the last two years. Despite some challenges arising from recent healthcare reforms, the industry has favorable supply/demand dynamics and high barriers to entry. US-listed <a href="https://www.smartkarma.com/entities/22633" target="_blank" data-smartkarma-citation="entities:22633:1">China Biologic Products (CBPO US)</a> trades at a significant discount to the implied private market values, but requires patience as management adjusts to the new operating environment.

Grifols SA (GRF SM) and Shanghai RAAS Blood Products Co Ltd (002252.SZ) recently announced an asset exchange that effectively combines the companies' blood products operations in China. This transaction marks the third investment (two are cross-border) into the industry in the last two years. Despite some challenges arising from recent healthcare reforms, the industry has favorable supply/demand dynamics and high barriers to entry. US-listed China Biologic Products (CBPO US) trades at a significant discount to the implied private market values, but requires patience as management adjusts to the new operating environment.

China Blood Products: Deals Highlight Values

China

PW Medtech Group Ltd is a medical device developer, manufacturer and marketer in China.  The Company's products include infusion products and orthopedic implant products.

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Pw Medtech (1358 HK)

Vital Fluids: Proposal Rejuvenates China Biologics

On the 19 June last year, CITIC Capital Holdings made an unsolicited, preliminary non-binding proposal for China Biologic Products (CBPO US) - a...

David Blennerhassett

China Blood Products: Deals Highlight Values

Grifols SA (GRF SM) and Shanghai RAAS Blood Products Co Ltd (002252.SZ) recently announced an asset exchange that effectively combines the...

Kemp Dolliver, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

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